Shaw's Supermarkets, Inc. v. N.L.R.B.

• Decision Date: 04 April 1989
• Docket Number: No. 88-1936,88-1936
• Parties: 132 L.R.R.M. (BNA) 2364, 112 Lab.Cas. P 11,429 SHAW'S SUPERMARKETS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 34

884 F.2d 34

132 L.R.R.M. (BNA) 2364, 112 Lab.Cas. P 11,429

SHAW'S SUPERMARKETS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 88-1936.

United States Court of Appeals First Circuit.

Heard April 4, 1989.

Decided Aug. 31, 1989.

Murray S. Freeman with whom Mark J. Mahoney and Nutter, McClennen & Fish were on brief for petitioner.

Paul Hitterman with whom Rosemary M. Collyer, Gen. Counsel, Robert E. Allen, Associate Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, and Peter Winkler, Supervisory Atty., were on brief for respondent.

Before BREYER and SELYA, Circuit Judges, and CAFFREY, ^* Senior District Judge.

BREYER, Circuit Judge.

The National Labor Relations Board (the "Board") found that Shaw's Supermarkets ("Shaw") violated National Labor Relations Act ("NLRA") Sec. 8(a)(1), 29 U.S.C. Sec. 158(a)(1), during a representation election held at Shaw's Wells, Maine distribution facility in January 1987. In the election, 71 votes were cast for no union, 46 votes for a Teamsters local, and one vote for an independent union. The finding of violation rested primarily upon the fact that five days before the election, a Shaw vice president told the employees at the plant:

that if they were to turn their affairs over to a third party [i.e., a union] that the employees would be guaranteed minimum wages and workmen's comp[ensation] and that's where our collective-bargaining process would begin.

The Board decided that this statement, taken in context, constituted a "threat of reprisal" against collective organizing, a threat that NLRA Secs. 8(a)(1) and 8(c) make illegal. 29 U.S.C. Secs. 158(a)(1), 158(c). See NLRB v. Gissel Packing Co., Inc., 395 U.S. 575, 618, 89 S.Ct. 1918, 1942, 23 L.Ed.2d 547 (1969). The Board ordered a new election. The Board now asks us to enforce its order.

We have examined the Board's decisions in this case and in prior cases on this subject, however, and comparing those prior cases with the facts of the present case, we conclude that the Board's findings here are inconsistent with what it has held before. That is to say, past precedent would require the Board to find in the employer's favor here. Although the Board is not permanently bound by its precedent, when it wishes to deviate from well-established precedent as significantly as it has done here, it must, at least, explain the reasons for its deviation. Because the Board has not explained its inconsistent decision in this case, we shall not now enforce its order, but instead we shall remand this case to the Board.

I.

Background.

A. Labor law. The basic principles of labor law that govern this case are well-established. Under NLRA Sec. 7, employees have the right to "self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing ..." 29 U.S.C. Sec. 157. Employers may not "interfere with, restrain, or coerce employees in the exercise of" those rights. NLRA Sec. 8(a)(1), 29 U.S.C. Sec. 158(a)(1). Moreover, the NLRA expressly states that a "threat of reprisal or force or promise of benefit" does not constitute otherwise protected "express[ion]." NLRA Sec. 8(c), 29 U.S.C. Sec. 158(c). Thus the NLRA prohibits employer speech during an election campaign which contains a "threat of reprisal" and thereby "interfere[s] with, restrain[s] or coerce[s]" employees in the exercise of their rights to "form, join or assist" labor unions. See NLRB v. Gissel Packing Co., Inc., 395 U.S. 575, 618, 89 S.Ct. 1918, 1942, 23 L.Ed.2d 547 (1969).

Whether any particular employer speech amounts to such a "threat of reprisal" depends upon the context in which the speech is uttered. Wyman-Gordon Co. v. NLRB, 654 F.2d 134, 145 (1st Cir.1981); Belcher Towing Co., 265 NLRB 1258, 1268 (1982); Plastronics, Inc., 233 NLRB 155, 156 (1977); Wagner Industrial Products Co., 170 NLRB 1413, 1413 (1968). And, as a general rule, the law gives the Board, not the courts, the authority to examine the circumstances, to find the facts, and to decide whether the remarks, in context, amounted to an unlawful threat. See NLRB v. Marine Optical, Inc., 671 F.2d 11, 18 (1st Cir.1982) ("Generally, courts will defer to the Board's special expertise on the impact of employer statements to employees."). See also Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); 5 U.S.C. Sec. 706(2)(E) (agency's fact findings must be supported by "substantial evidence"). But, as we shall discuss shortly, the Board's findings must be consistent with its own rules and precedents or the Board must explain the deviation. See infra pp. 36-37.

B. Facts. In January 1987, in the midst of a union representation campaign, and five days before the election, Charles Wyatt, Shaw's vice president for distribution, held three meetings with three different groups of employees. In response to questions at the first meeting, Wyatt said that if a union won "the employees would be guaranteed minimum wages and workmen's comp and that's where our collective bargaining process would begin." He made the same statement to the other two groups of employees. Wyatt also told all the employees that "typically the art of collective bargaining is a give and take process and that ... we would start with minimum wages and workmen's comp and build from that point." Wyatt referred to a union as a "third party." He also said that "the first contract is generally the toughest or hardest to negotiate ... and that generally it could take up to a year." Wyatt's audience contained both full-time employees, then earning up to $11.70 an hour, and part-time employees, then earning about $5.00 an hour; the federal minimum wage at that time was $3.55 an hour.

The Board found no other unfair labor practices committed by Shaw during this election campaign. We can find nothing else in the record that might sharpen the details or color the background of the "context" of the bargaining campaign, either in the Board's or the company's favor. And as Board counsel told us at oral argument, neither can the Board.

II.

The Problem of Inconsistency.

Were the Board writing on a blank slate, were there no set of Board cases on the subject, we should likely find sufficient basis in the record to sustain the Board's conclusion. Statements like those at issue here--that the company will "begin" its bargaining at "minimum wages and workmen's comp," that it will "build from that point"--might, depending on the context, innocently represent a legal truth about how the collective bargaining process works, legitimately remind employees that a union might trade certain payments or benefits that many workers now enjoy in order to obtain other payments or benefits, or improperly constitute a threat that, if the union wins, the employer will strip benefits back to the minimum, forcing the union to struggle even to keep the status quo. In deciding how to react to these statements, a court must recognize that the Board is expert, not simply about the factual context of the individual case, but also about how employees are likely to understand certain forms of words in the mine-run of cases. Thus, if the Board were to conclude that it should always assume that employees would reasonably take words of the sort at issue here as threats of regressive bargaining in the absence of added employer explanation to the contrary, we believe (though we need not, and do not decide) that a court could not easily say the Board was acting outside the authority that the law grants it.

The problem in this case for the Board, however, is that (a) it is not writing on a blank slate, but has written on the subject often in the past; (b) the Board has not said that it wishes to depart from its several prior cases on the subject; yet (c) as we shall discuss below, the prior cases dictate a result in Shaw's favor.

The law that governs an agency's significant departure from its own prior precedent is clear. The agency cannot do so without explicitly recognizing that it is doing so and explaining why. As Professor Davis has pointed out, "[t]he dominant law clearly is that an agency must either follow its own precedents or explain why it departs from them." 2 K. Davis, Administrative Law Treatise Sec. 8:9 at 198 (1979). The agency has a

duty to explain its departure from prior norms. Secretary of Agriculture v. United States, [347 U.S. 645, 653-54, 74 S.Ct. 826, 831-32, 98 L.Ed. 1015 (1954) ]. The agency may flatly repudiate those norms, deciding, for example, that changed circumstances mean that they are no longer required in order to effectuate congressional policy. Or it may narrow the zone in which some rule will be applied, because it appears that a more discriminating invocation of the rule will best serve congressional policy. Or it may find that, although the rule in general serves useful purposes, peculiarities of the case before it suggest that the rule not be applied in that case. Whatever the ground for departure from prior norms, however, it must be clearly set forth so that the reviewing court may understand the basis of the agency's action and so may judge the consistency of that action with the agency's mandate....

[If] the agency distinguishes earlier cases[, it must] assert[ ] distinctions that, when fairly and sympathetically read in the context of the entire opinion of the agency, reveal the policies it is pursuing.

Atchison, Topeka & Santa Fe Railway Co. v. Wichita Board of Trade, 412 U.S. 800, 808-09, 93 S.Ct. 2367, 2375-76, 37 L.Ed.2d 350 (1973) (plurality opinion) (emphasis added).

It is, of course, true that the Board is free to adopt new rules of decision and that the new rules of law can be given retroactive application. Nevertheless the Board may not depart sub silentio, from its usual rules of decision to reach a different, unexplained result in a single case. As this court held in Mary Carter Paint Co. v. FTC [333 F.2d...